Saudi investor may buy French hotels
Starwood Capital is in talks to sell the Concorde Groupe, through which it owns 12 luxury hotels in France, to JJW Hotels & Resorts, the International Herald Tribune reported.
JJW Hotels & Resorts, which already owns about 60 European hotels and resorts, is part of MBI International, controlled by Saudi businessman Sheik Mohamed Bin Issa Al Jaber.
Concorde Groupe properties that would be part of the sale include the Concorde La Fayette and Lutetia in Paris, the Hôtel Martinez in Cannes and the Palais de la Méditerranée in Nice. JJW Hotels & Resorts is expected to keep the hotels’ current management.
The hotels could be worth as much as $2 billion, a Saudi newspaper reported, but neither Starwood nor JJW Hotels & Resorts would comment on the value of the hotels.
Starwood is also negotiating to sell another one of its Paris hotels, the Ambassador, to a different, unidentified buyer.
The company said it intends to focus on luxury hotels, including the Hôtel de Crillon, one of its remaining Paris properties.
Luxury housing buoyant in Dusseldorf
Even as the rest of the world’s housing markets decline, Dusseldorf’s luxury housing market is thriving.
Much of the 1.65 million square feet of real estate under construction in Dusseldorf is high-end, worth more than $885 million in total, the International Herald Tribune reported. Luxury home prices in the city start at around $580 per square foot.
Dusseldorf, known for its trade shows, is credited with recasting itself in recent years as a more international city. It is well-situated, within a half-hour of other cities like Cologne and with about 12 million people living within a one-hour radius.
The German residential market, unlike the markets in Britain, Spain and elsewhere in Europe, has kept pace in the face of global turmoil with prices remaining flat, thanks to low rents that kept many out of the market.
But prices for high-end properties are rising because supply is not keeping up with demand. Pharmaceutical, media and law firm jobs are feeding demand for upscale real estate, the article said.
China tries to shore up real estate prices
Last month, the Chinese government instituted several measures in response to fears that the softening of the country’s real estate market will lead to a spike in loan defaults.
The government mandated that commercial banks reduce mortgage rates and down payments for borrowers trying to obtain their first mortgages, the International Herald Tribune reported. The government also reduced the tax on real estate purchases for first-time home buyers purchasing apartments of less than 970 square feet.
In Shenzhen, the city hardest hit by China’s real estate troubles, housing prices have already fallen by up to a third. A national real estate price index released in late October showed a dip of 0.1 percent in September from August, but experts say price drops are more severe.
Real estate problems in China may not send the country into a full-blown financial crisis like the meltdown in the U.S. because China’s mortgage system is relatively unsophisticated, experts said. About half of all Chinese home buyers pay cash, sometimes borrowed, instead of getting mortgages. Chinese banks also tend to renegotiate monthly payments rather than foreclose on homes.
Compiled by Sara Polsky